Contractor loan schemes given time to settle
Contractors who have taken out loans to avoid income tax have until 9 January to settle their affairs, HMRC has said.
A contractor loan scheme uses an offshore company to pay contractors a large proportion of their income through a loan instead of a salary.
Contractors can bring their tax affairs up to date "on the best possible terms" for tax years up to 5 April 2011, according to the Revenue.
"In general terms, for a limited time HMRC is offering to tax the amount received as loans at marginal income tax rates and in most cases there will be no claim to PAYE or National Insurance Contributions (NICs)," said tax expert Ray McCann from Pinsent Masons.
"Late payment interest will be added but there will be no penalty."